More Fallout in Viacom War: Board Members Vent
Statements condemn lack of access to ailing mogul.
In the continuing volleys of shots fired from warring camps over the future of Sumner Redstone's media empire, board member Frederic Salerno, 72, has issued a statement that lends support to the position of embattled chairman and CEO Philippe Dauman and bemoans that he has been denied access to the frail 92-year-old billionaire.
At the same time, board member George Abrams, 83, who along with Dauman was ejected from the National Amusements board and trust that will control the fate of both Viacom and CBS once Redstone dies or is incapacitated, recriminated that he had represented Redstone as an attorney for more than 50 years, adding, "The Sumner Redstone I knew would never have taken this action."
On Friday, Redstone booted Dauman and Abrams as trustees of the trust set to take over voting control of the media companies when the ailing mogul, who will turn 93 on May 27, dies or is declared incapacitated. Dauman promptly issued a statement calling the dismissals "a shameful effort" by Redstone's 62-year-old daughter Shari to take control of the Redstone media empire, which includes Viacom and CBS. Dauman said Sumner lacked capacity to make the changes in question and said Shari had made unlawful use of her father's signature.
Salerno, a retired Verizon executive, was named the lead independent director of Viacom in March and is known to be a close Dauman ally. He presides over the committee that awarded Dauman an enhanced $54 million compensation package in January even though Viacom's stock had plunged more than 40 percent in the previous year.
In 2015, proxy advisory firm Institutional Shareholder Services issued a rare recommendation against re-election of all five compensation committee members because of the disconnect between pay and performance. Such a provision had little chance of passing because Redstone controls the company, but ISS head of policy development Marc Goldstein said, "The hope is the independent directors [would be] embarrassed into taking action."
Read Salerno, Abrams' and Shari's full statements below.
Salerno: "In March, the Board of Viacom elected me to serve as Lead Independent Director to ensure a continuation of good governance at Viacom, particularly as a result of Sumner Redstone’s diminished role.
The majority of the full Board and every Board Committee is comprised of independent directors and we are completely focused on ensuring that the interests of all shareholders are considered and fully protected. The Board has taken a number of steps including, most recently, eliminating Mr. Redstone's compensation. We took this action based upon his recent complete lack of communication with the Viacom Board and management team and his silence during recent board meetings, as well as recent public disclosures raising concerns about his health. In addition, despite numerous requests, I, along with the Chair of Viacom’s Governance and Nominating Committee, have been denied access to Sumner for a face-to-face meeting.
The Independent Directors are fully engaged and will carefully monitor actions at National Amusements, which is the controlling shareholder of Viacom. We are also continuing to work closely with the management team of Viacom and we fully endorse the strategy for the future of Viacom that the team presented at the Board’s day-long strategy meeting this week.
We have great respect for Sumner and what he has accomplished. Our overarching duty is to represent the interests of all shareholders — in the same spirit that Sumner Redstone always led our Board to do. We will continue to fulfill that role and uphold our fiduciary responsibility to ensure that Viacom’s interests are protected in concert with good governance practices."
Abrams: “I have known and represented Sumner Redstone for over 50 years. I worked closely with him on the building of his theater chain, the acquisitions of Viacom, Paramount and CBS and countless business matters relating to all three of those entities as well as National Amusements. I have also handled many personal matters for Sumner. Above all, he is my friend. The Sumner Redstone I knew would never have taken this action. What is going on now is unsettling and sad.”
Shari: "I fully support my father's decisions and respect his authority to make them."